January reinsurance renewal pricing for U.S. property-catastrophe risks could be down by as much as 15-25% in the United States and 5% in Europe and the U.K., according to research from Clifford Gallant, an equity analyst with Nomura investment bank.
Preliminary talks with brokers and underwriters indicate that prices are falling faster than was expected a month ago, he states. Casualty lines are generally flat worldwide.
Gallant says prices are being pressured by the growing impact of alternative capital, the impact of a relatively quiet loss year in 2013 and growing industry capital surplus. In Europe, these forces are being offset somewhat by flood losses in Central Europe and ongoing concerns about casualty profitability.
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